For a company with remarkably little growth potential, AMC Entertainment (NYSE:AMC) really doesn’t know when to quit. Retail investors haven’t faltered in their commitment to the struggling theater chain, regardless of its lack of profitability. Today, AMC stock declined another 3%, even after a potentially positive update.
According to a tweet from CEO Adam Aron, AMC Entertainment has reached 1 million members on AMC Investor Connection, a company program for shareholders. This update has generated a lot of positive engagement on social media. But after AMC stock trended downward today, it’s clear this company is in many ways like Mullen Automotive (NASDAQ:MULN); even when it has good news to report, it can’t garner sustainable momentum.
How much are these 1 million retail backers contributing to AMC stock’s growth? One look at the performance of shares lately tells us everything we need to know.
Even an Army Can’t Help AMC Stock
The past week has been highly volatile for AMC stock, with shares spending most of it in the red. The stock is down 4% for the last five days. Today has been no different. Shares remain just below the $5 penny stock line and there’s nothing to suggest they will regain the $5 mark anytime soon.
At around 12:00 p.m. Eastern today, Aron issued the following tweet:
AMC Investor Connection is our free program of communications and offers for AMC shareholders. ONE MILLION PEOPLE have now enrolled as members. While I get a few hate messages, AMC is SO fortunate to have passionate retail investors with us. TY, TY, TY! https://t.co/eIH4vXNdAp pic.twitter.com/xn1opg1Nor
— Adam Aron (@CEOAdam) May 24, 2023
The fact that AMC stock has that many retail backers is hardly surprising. But it’s discouraging to see that so many investors still can’t recognize this meme stock for the poor investment that it is. Over the past six months, shares have been highly volatile and demonstrated no sustainable growth, falling about 35%. AMC has also seen plenty of bad news lately, making a recovery even less likely. For example, Ray Dalio’s Bridgewater Associates recently sold its entire stake in the company, a possible indicator of more trouble ahead. As of this writing, the strong consensus from Wall Street analysts is that AMC stock is a “sell.”
To top it off, AMC continues to fail to innovate. Recently, the company launched a new $3 theater ticket promotion. While this is a better idea than its retail popcorn efforts, the development isn’t likely to yield substantial results.
Big names like Bridgewater Associates are ditching AMC stock and moving on to better investments. If retail investors could turn AMC into a winner, they would have done so already.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
